PRINCETON, N.J.--(BUSINESS WIRE)--May. 5, 2009--
Church & Dwight Co., Inc. (NYSE:CHD) today reported net income for the
quarter ended March 27, 2009 of $62.6 million or $0.88 per share,
compared to last year’s reported net income of $56.2 million or $0.81
per share. Excluding the previously announced plant restructuring charge
of $0.04 per share, this year’s first quarter earnings were $0.92 per
share.

First Quarter Review

Net sales for the first quarter increased 5% to $580.9 million. Organic
sales increased by approximately 6% for the quarter which excludes the
impact of foreign exchange, acquisitions and divestitures. Foreign
exchange reduced reported sales by approximately 4% in the quarter,
while acquisitions net of divestitures, increased reported sales by
approximately 3%.

Consumer International sales were $82.8 million, a $16.9 million
decrease or 17% below the prior year first quarter sales. Sales
increases, primarily in Canada and Australia, were more than offset by
unfavorable foreign exchange rates of approximately 20% and
approximately $3 million due to the divestiture of a business at the end
of the third quarter in 2008. Specialty Products sales were $60.0
million, a $10.4 million decrease or 15% below the prior year first
quarter sales. Approximately $4 million of the sales decrease is due to
a business divested in the first quarter of 2008 and $3 million of
unfavorable foreign exchange rates. A significant decline in U.S. milk
prices has weakened the dairy market resulting in lower volumes in the
animal nutrition business.

Gross margin increased to 42.9% in the first quarter compared to 40.5%
in the same quarter last year. Excluding the $5.2 million plant
restructuring charge reflected in cost of sales, gross margin was 43.8%,
a 330 basis point improvement from the prior year first quarter. The
increase in gross margin reflects price increases, lower commodity
costs, the higher margins associated with the sales of products relating
to the businesses acquired from Coty, the impact of liquid laundry
detergent concentration and the benefits of cost reduction programs.

Marketing expense was $66.4 million in the first quarter, a $12.9
million increase over the prior year first quarter. The increased
marketing spending was focused on the brands acquired from Coty as well
as higher spending on the Company’s 8 “power brands.” Marketing expense
as a percentage of net sales increased 170 basis points to 11.4% in the
quarter compared to 9.7% in last year’s first quarter.

Selling, general, and administrative expense (SG&A) was $78.3 million in
the first quarter, a $0.5 million increase over the prior year’s first
quarter. SG&A as a percentage of net sales was 13.5% in the quarter, a
reduction of 60 basis points as compared to last year’s first quarter.
Last year’s first quarter included a $3.0 million gain on the
divestiture of a small Specialty Products subsidiary. The remaining
change in SG&A is attributed to lower costs internationally due to
foreign exchange and lower operating expenses and impairment charges of
approximately $7 million associated with the divested International
business, partially offset by higher information systems costs and
amortization and operating costs related to the acquisition from Coty.

Operating income increased 13% to $104.7 million in the first quarter
compared to $92.8 million in the prior year first quarter. Operating
margin expanded 120 basis points to 18.0% and, excluding the plant
restructuring charge, expanded 210 basis points to 18.9%.

The effective tax rate in the first quarter was 37.1% compared to 35.7%
in the prior year first quarter due to a higher proportion of projected
US taxable income and higher state income taxes. The effective tax rate
for the full year is expected to be approximately 37%.

Free Cash Flow and Net Debt

For the quarter, the Company reported $92.0 million of net cash from
operations compared to $62.7 million in the first three months of 2008.
For the first quarter, the Company generated $70.7 million in free cash
flow compared to $56.4 million in the prior period. Capital expenditures
in the first quarter were $21.3 million and included approximately $15
million related to the construction of a new laundry detergent
manufacturing plant and warehouse in York County, Pennsylvania. The
increase in free cash flow is primarily related to higher net income,
higher non-cash expenses and improved working capital management.

At quarter-end, the Company had net debt of $591 million (total debt of
$871 million less cash of $280 million) compared to net debt at December
31, 2008 of $658 million (total debt of $856 million less cash of $198
million). The leverage ratio of total debt to Adjusted EBITDA (as
defined in the Company’s principal credit agreement) is 1.9 for the
twelve months ended March 27, 2009.

New Product Activity

On the new product front, Mr. Craigie commented, “We will continue to
introduce a steady pipeline of new and improved products in 2009 to
drive solid organic growth. Specifically, we will introduce over 20 new
products in 2009. These products will be largely focused on our 8 power
brands and will have a strong value orientation.”

In family planning, the Company has two additions to the Trojan product
line: TROJAN 2 GO which contains two condoms in a pocket-sized card that
makes it easier to discreetly carry condoms wherever you go and a new
condom called TROJAN ECSTASY, featuring a unique comfort shape and
UltraSmooth lubricant.

In Oral and Skin care, the Company introduced a new line of SPINBRUSH
products that use advanced sonic technology for deep cleaning at a price
that provides significant value compared to other premium sonic brushes.
The Company also expanded the NAIR depilatory product line with NAIR
Exfoliator with Microbeads. ORAJEL also added two new products, BABY
ORAJEL Cooling Cucumber Teething Gel and BABY ORAJEL Tooth and Gum
Cleanser.

In Household products, the Company launched ARM & HAMMER Wet Dryer
Cloths, a revolutionary fabric softener that delivers liquid-like
softening, freshening and dryer sheet static control all in the
convenience and value of just one dryer sheet. The Company also expanded
the ARM & HAMMER with OXICLEAN line of detergents with a product
designed for High Efficiency washing machines while expanding the
environmentally responsible ARM & HAMMER Essentials detergent line with
the introduction of a new powder product.

New Manufacturing Plant and
Distribution Center

The Company is on track with its previously announced project to
construct a new integrated laundry detergent manufacturing plant and
distribution center in York County, Pennsylvania and the related closing
of the Company’s North Brunswick, NJ complex. The new facility is
scheduled to open in the fourth quarter of 2009. The Company expects to
spend $100 million in 2009, $20 million in 2010, for a total of $170
million in capital expenditures and cash transition expenses from 2008
to 2010 on the project. The new facility is expected to be a significant
contributor to gross margin expansion in 2010.

The project resulted in plant restructuring charges in the first quarter
of $5.2 million or $0.04 per share. These charges relate primarily to
accelerated depreciation of the North Brunswick complex, severance and
other one-time costs associated with the closing of those facilities.

Outlook

Mr. Craigie commented, “As a result of our strong first quarter, a
better understanding of consumer purchasing trends in this recessionary
economy, and detailed discussions with retailers concerning their
support for our brands over the remainder of the year, we are now more
optimistic about our 2009 business forecast. We now expect to achieve
organic growth of at least 3% in 2009 driven by the strong consumer
appeal for our value-oriented products, which now comprise 40% of our
domestic revenue base, our appealing pipeline of new products, and
higher marketing spending.”

Mr. Craigie continued, “Regarding gross margin, we are raising our
estimate for gross margin expansion in 2009 and expect to meet or exceed
200 basis points of expansion (excluding plant restructuring charges),
reflecting greater than expected commodity savings, the contribution of
2009 price increases in our International business, and greater benefit
from cost reduction programs. We expect that the higher gross margin
estimate will enable us to increase marketing spending in 2009 to
approximately 13% of sales. We are focusing this increase on building
brand equity in our 8 power brands, which should lead to even stronger
growth when the economy recovers. In addition, we are planning a
significant increase in marketing, merchandising, couponing and slotting
costs in the second quarter, compared to the first quarter, primarily to
support the launch of new products.”

With regard to full year earnings, Mr. Craigie said, “We are raising our
previously announced earnings per share estimate of $3.20-$3.25 to
$3.30-$3.35, which represents a 15% to 17% increase over 2008 results,
excluding plant restructuring charges. The 2009 reported earnings per
share is expected to be $3.05-$3.10. We expect the earnings per share to
be evenly balanced over the remaining three quarters of the year.”

As previously reported, at its April 29th Board meeting, the
Company declared a quarterly dividend of $0.09 per share. The dividend
will be payable June 1, 2009 to stockholders of record atthe
closeof business on May 11, 2009. This is the
Company’s 433rd regular quarterly dividend.

Church & Dwight will host a conference call to discuss first quarter
2009 results on May 5, 2009 at 10:00 a.m. (ET). To participate, dial in
at 866-825-1692, access code: 58645294. A replay will be available two
hours after the call at 888-286-8010, access code: 45671091. Also, you
can participate via webcast by visiting the Investor Relations section
of the Company’s website at www.churchdwight.com.

Church & Dwight Co., Inc. manufactures and markets a wide range of
personal care, household and specialty products under the Arm & Hammer
brand name and other well-known trademarks.

This release contains forward-looking statements relating, among others,
to short- and long-term financial objectives, sales and earnings growth,
cash flow, margin improvement, marketing spending, price increases on
certain products, new product introductions, the timing of new product
launches, consumer demand for the Company’s products, uncertain economic
and marketplace conditions and events, cost of raw materials, cost
reduction programs, the effect of the acquired businesses from Coty,
timing of completion and gross margin contribution of the new laundry
detergent manufacturing plant and warehouse facility, capital
expenditures and restructuring charges related to the new facility and
forecasted organic growth, gross margin and earnings per share and
anticipated increase in second quarter marketing, merchandising,
couponing and slotting costs. These statements represent the intentions,
plans, expectations and beliefs of the Company, and are subject to
risks, uncertainties and other factors, many of which are outside the
Company’s control and could cause actual results to differ materially
from such forward-looking statements. The uncertainties include
assumptions as to market growth and consumer demand (including the
effect of political and economic events on consumer demand), retailer
actions in response to changes in consumer demand and the economy, raw
material and energy prices, the financial condition of major customers
and vendors, interest rate and foreign currency exchange rate
fluctuations and changes in marketing and promotional spending. With
regard to the new product introductions referred to in this release,
there is particular uncertainty relating to trade, competitive and
consumer reactions. Other factors that could materially affect actual
results include the outcome of contingencies, including litigation,
pending regulatory proceedings, environmental matters and the
divestiture of assets. For a description of additional factors that
could cause actual results to differ materially from the forward looking
statements, please see the Company’s quarterly and annual reports filed
with the SEC, including information in the Company’s annual report on
Form 10-K in Item 1A, “Risk Factors.”

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income (Unaudited)

Three Months Ended

(In thousands, except per share data)

Mar. 27, 2009

Mar. 28, 2008

Net Sales

$

580,867

$

552,867

Cost of sales

331,509

328,761

Gross profit

249,358

224,106

Marketing expenses

66,373

53,485

Selling, general and administrative expenses

78,325

77,859

Income from Operations

104,660

92,762

Equity in earnings of affiliates

2,705

2,380

Other income (expense), net

(7,873

)

(7,738

)

Income before noncontrolling interest and taxes

99,492

87,404

Income taxes

36,916

31,211

Net Income of noncontrolling Interest

7

2

Net Income attributable to Church & Dwight

$

62,569

$

56,191

Net Income per share – Basic

$

0.89

$

0.85

Net Income per share – Diluted

$

0.88

$

0.81

Dividend per share

$

0.09

$

0.08

Weighted average shares outstanding - Basic

70,234

66,343

Weighted average shares outstanding - Diluted

71,312

70,817

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(Dollars in thousands)

Mar. 27, 2009

Mar. 28, 2008

Assets

Current Assets

Cash, equivalents and securities

$

280,241

$

208,062

Accounts receivable

216,469

243,513

Inventories

199,882

214,966

Other current assets

60,238

26,248

Total Current Assets

756,830

692,789

Property, Plant and Equipment (Net)

398,965

339,808

Equity Investment in Affiliates

9,821

9,563

Tradenames and Other Intangibles

803,907

657,464

Goodwill

845,412

688,128

Other Long-Term Assets

85,681

77,531

Total Assets

$

2,900,616

$

2,465,283

Liabilities and Stockholders' Equity

Short-Term Debt

$

130,899

$

54,875

Other Current Liabilities

328,710

294,519

Total Current Liabilities

459,609

349,394

Long-Term Debt

740,282

692,982

Other Long-Term Liabilities

310,248

289,383

Stockholders' Equity

1,390,477

1,133,524

Total Liabilities and Stockholders' Equity

$

2,900,616

$

2,465,283

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flow (Unaudited)

Three Months Ended

(Dollars in thousands)

Mar. 27, 2009

Mar. 28, 2008

$

62,569

$

56,191

Net Income

Depreciation and Amortization

21,670

15,212

Deferred Income Taxes

10,106

2,103

Gain on Asset Sale

--

(3,005

)

Asset Impairment Charges and Asset Write-Offs

--

5,626

Non Cash Compensation

2,707

2,424

Other

(139

)

(2,374

)

Changes in Assets and Liabilities:

Accounts Receivable

(7,980

)

3,436

Inventories

(2,348

)

(3,549

)

Prepaid Expenses and Other Current Assets

(1,466

)

(2,409

)

Accounts Payable and Accrued Expenses

(11,780

)

(30,473

)

Income Taxes Payable

20,413

20,936

Excess tax Benefits on Stock Options Exercised

(936

)

(1,872

)

Other liabilities

(835

)

477

Net cash from operating activities

91,981

62,723

Capital expenditures

(21,281

)

(6,283

)

Proceeds from sale of assets

--

9,620

Other

666

847

Net cash (used in) provided by investing activities

(20,615

)

4,184

Net change in debt

15,016

(108,160

)

Payment of cash dividends

(6,309

)

(5,307

)

Stock option related

3,007

4,633

Net cash provided by (used in) financing activities

11,714

(108,834

)

F/x impact on cash

(838

)

180

Net change in cash and investments

$

82,242

$

(41,747

)

Free cash flow

$

70,700

$

56,440

SUPPLEMENTAL INFORMATION

2009 and 2008 Product Line Net
Sales

Three Months Ended

Mar. 27, 2009

Mar. 28, 2008

Percent Change

Household Products

$

284.1

$

242.9

17

%

Personal Care Products

$

154.0

$

139.9

10

%

Consumer Domestic

$

438.1

$

382.8

14

%

Consumer International

$

82.8

$

99.7

-17

%

Total Consumer Net Sales

$

520.9

$

482.5

8

%

Specialty Products Division

$

60.0

$

70.4

-15

%

Total Net Sales

$

580.9

$

552.9

5

%

The following discussion addresses
reconciliation of non-GAAP measures used in this press release to the
most directly comparable GAAP measures:

The press release provides information regarding the Company’s net
income per share, gross margin and operating margin adjusted to exclude
charges related to plant restructuring charges incurred in 2009.
Management believes that the presentation of adjusted net income per
share, gross margin and operating margin (including reconciliation
information in the press release) is useful to investors because it
enables them to assess the Company’s performance exclusive of an event
that does not reflect the Company’s day-to-day operations.

Organic Growth

The press release provides information regarding organic growth, namely
the percentage increase in net sales adjusted to eliminate the impact of
businesses acquired and divested during the preceding four quarters and
the effect of foreign exchange rate changes. Management believes that
the presentation of organic growth is useful to investors because it
enables them to assess, on a consistent basis, sales of products that
were marketed by the Company during the entirety of relevant periods. In
addition, the exclusion of the effect of foreign exchange rate changes
is useful to investors because currency fluctuations are out of the
control of, and do not reflect the performance of management.

Three Months Ended

Mar. 27, 2009

Reported Percentage

Increase in Net Sales

5

%

Add:

Effect of Foreign

Exchange Rate Changes

4

%

Less:

Effect of Acquisitions

and Divestitures

(3

%)

Organic Growth

6

%

Free Cash Flow

Management believes that the presentation of free cash flow is useful to
investors because it provides an additional perspective on cash flow
from operations in excess of amounts required for reinvestment and
provides a measure of the Company’s ability to fund acquisitions, repay
debt and pay dividends. Free cash flow is calculated as cash provided by
operating activities less capital expenditures. Free cash flow is one of
the measures used in determining management’s annual incentive award.
Free cash flow does not represent cash available only for discretionary
expenditures, since the Company has mandatory debt service requirements
and other contractual and non-discretionary expenditures. Please refer
to the condensed cash flow statement for details.